Global Markets Rattled as U.S. Tariff Threats Escalate, Dollar Heads Lower

Key Takeaways:
*The White House announced sweeping tariff increases on a broad range of countries—Japan, South Korea (25%), Indonesia (32%), Thailand (36%), and others—reviving concerns over escalating global trade tensions.

*The Dow Jones tumbled over 400 points while the U.S. dollar softened, as risk sentiment soured on fears of retaliatory actions and geopolitical uncertainty.

Financial markets were jolted once again after the White House unveiled fresh details of sweeping tariff hikes targeting a wide range of countries, reigniting fears of a global trade conflict. Key Asian partners, including Japan and South Korea, face a 25% tariff, while the U.S. warned that any retaliatory moves could trigger even steeper levies.

Other nations caught in the crosshairs include Malaysia, Tunisia, and Kazakhstan (25%), South Africa and Bosnia and Herzegovina (30%), Indonesia (32%), Serbia and Bangladesh (35%), Cambodia and Thailand (36%), and Laos and Myanmar (40%).

The escalating trade tensions sent Wall Street sharply lower, with the Dow Jones Industrial Average tumbling more than 400 points in the last session. The U.S. dollar, which had shown signs of revival, also edged lower on the news as risk sentiment deteriorated.

While the White House has left the door open for negotiations until the August 1 deadline, heightened uncertainty weighed heavily on market sentiment. Safe-haven demand surged, with gold rebounding strongly in the last session as investors sought shelter from rising geopolitical risks.

Technical Analysis

Dollar_Index, H4: 

The U.S. dollar lost traction in the latest session, paring earlier gains as fundamental headwinds weighed on the greenback’s recent strength. The Dollar Index (DXY) opened with a downside gap but managed to hold above its key uptrend support level, indicating that the broader bullish trajectory remains intact.

Despite the pullback, momentum indicators continue to signal strength. The Relative Strength Index (RSI) remains near overbought territory, while the MACD has broken decisively above the zero line, both pointing to sustained upward momentum for the dollar.

With the technical outlook still supportive, the greenback may remain resilient in the near term, although traders are advised to stay cautious amid evolving macroeconomic risks and geopolitical developments.

Resistance Levels: 98.10, 98.65
Support Levels: 96.50, 95.75

XAUUSD, H4

Gold prices climbed over 1% in the previous session, staging a strong rebound after finding solid support above the 61.8% Fibonacci retracement level, which also aligns with the prevailing downtrend support line. The confluence of these technical levels underscores that gold remains within its broader uptrend trajectory.

Momentum indicators, however, are mixed. The Relative Strength Index (RSI) is hovering near the midline, while the MACD has retreated toward the zero line. A rebound in both indicators from current levels would further validate the bullish bias and potentially pave the way for additional upside in the precious metal.

Investors continue to monitor macroeconomic uncertainties and geopolitical developments, which could drive fresh demand for safe-haven assets like gold.

Resistance Levels: 3381.80, 3483.75
Support Levels: 3300.00, 3225.00